Gold News: Gold On Lows While Awaiting Fed Decision

Gold News

In the latest gold news: As of March 19 at approximately 11:44am EST, gold was trading at $1316.02 per ounce, staying fairly stagnant since last week. At approximately this time last week, gold was trading at $1318.40 per ounce.

gold news

Recently gold tested the key support price level of $1300 and has since bounced back up but has yet to recover to the point it was before crashing down. This week, the prices of gold remain barely changed from last week and the latest trade data from the Commodity Futures Trading Commission is now showing that hedge funds have reduced their position and exposure to gold in accordance with aggressive action on the part of the Federal Reserve. For many analysts, this is not surprising, and even further liquidation in the gold market is standard as this has been a somewhat established pattern since the end of 2015. Bill Baruch, president of Blue Line Futures, stated, “We are not calling this the low in gold, as we expect Wednesday to bring tremendous volatility […] Gold bulls have been on edge ahead of this week’s FOMC meeting […] we believe this sets the table for a buying opportunity”. This follows on the previous hearing by the new Federal Reserve chair, and is a strong reminder to keep an eye on the Fed as an indicator for the greenback and consequently for the bullion.

Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen stated, “We have plenty of geopolitical risks and uncertainty, which continue to provide support, and once the rate hike’s out of the way the market will return its attention to whether Washington is moving further towards protectionism and trade wars, which could lead to lower growth”. Hansen followed this by adding that the price of gold has previously recovered following a US rate hike and he expects this to reoccur. Hansen is of course referring to the Federal Open Market Committee (FOMC) meeting which will begin on Tuesday morning and end on Wednesday afternoon with a statement. Federal Reserve Chairman Jerome Powell will also hold his first press conference after the meeting. Following this meeting, the US central bank is expected to raise interest rates in the first instance of the year. Following a likely increase of 25 basis points, analysts are now wondering whether Fed policymakers forecast four rate hikes this year instead of the original three. Mark To, head of research at Hong Kong’s Wing Fung Financial Group stated, “I think the overall economic recovery is good enough for the central bank to consider a faster pace”.

This sentiment has caused the bullion to remain fairly low in price for the year. In the 14-day gold prediction ending January 02, I Know First’s algorithm based on a stock prediction algorithm showed an impressive 100% accuracy rate, as seen in “Gold Forecast Based on Algorithmic Trading: Returns up to 4.53% in 14 Days.” After a fortnight, I Know First’s average percent change came out to 4.53% with GLD as the top earner, bringing in an impressive 4.53% return to investors.

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